Left unchecked, employee theft can reduce cash flow to a trickle. How extensive is the problem? Bevinco, an international beverage auditing service, estimates internal theft costs bars on average 24 to 26% of gross sales. The very thought is enough to make seasoned managers wince and bar owners shudder.
Preventing theft is far from easy. Bartenders typically work for long stretches of time without direct supervision and are afforded autonomy in handling guest transactions at the bar. Their position requires them to portion inventory, prepare drinks and collect sales proceeds, all before recording a single detail of the transaction into the operation’s point-of-sale. The result is a job laced with endless opportunities to rip off the house and its clientele.
Familiarity with how bartenders steal and knowing what to look for constitute management’s first line of defense. Sometimes theft is overt and undisguised, like pouring heavy shots to receive bigger tips, or stuffing cash sales directly into a tip jar. However, ploys like these are so easily detected they’re actually risky, so bartenders usually rely on less obvious schemes.
Pocket-padding maneuvers include:
• Short-pouring — This classic maneuver often is used because it doesn’t negatively impact pour cost. When short-pouring, a bartender under-portions a series of drinks, creating a surplus of liquor to later sell for personal profit. To ensure the shortages go unnoticed, drinks are prepared by pouring the liquor on top of the mixer. Even if the guest stirs the drink, the first few sips will taste as usual, perhaps even stronger.
• Substitutions — Although a ploy with many different variations, substituting essentially involves preparing call drinks with a less expensive brand of liquor while still charging premium prices. The bartender then can enter the sale at a well or call price and pocket the cash difference.
• Tapping up — In theory, the outright theft of liquor should increase a bar’s pour costs. To effectively negate the theft’s impact, a bartender need only replace the volume of liquor stolen by adding an equal amount of water to the brands involved. Unless a hydrometer is handy, it’s difficult to detect the addition of a few ounces of water in a liter bottle of spirits.
• Juggling — Juggling occurs when a bartender collects cash proceeds for drinks from two or more customers at once. The bartender then is free, for example, to enter only half of the transaction and deposit all of the collected cash in the till to be retrieved later, at a more opportune time.
Dropping Back on Defense
One reason behind-the-bar schemes are so effective is that most bartenders conduct themselves professionally. Faced with the same opportunities to pad their income, professional bartenders choose instead to look out for the best interests of the house and perform their jobs sans a hidden agenda. Paradoxically, it’s the ethical behavior of the majority that thoroughly obscures the actions of the few, making it harder to diagnose the problem and root out its cause.
Implementing cost-control procedures at the bar serves two purposes. Although primarily intended to eliminate operational areas of weakness, anti-theft measures also make it easier for honest bartenders to remain honest and harder for the others to operate undetected by establishing standards of conduct and clearly defining expectations.
Few managers or bar owners want to acknowledge that their bartenders might be stealing from them. Implementing anti-theft measures will better ensure that they won’t need to.
Tactics to consider include:
• Pulling cash drawers — Bartenders often stash stolen cash in their cash drawers. Closing out the point-of-sale immediately at the end of a shift and removing all of the cash drawers will force the bartender to risk withdrawing the cash while people are still milling about instead of during the privacy of closing. Bartenders also should be prohibited from checking-out their own cash drawers for the same reason.
• Tip jars — Bartenders should be prohibited from taking money out of their tip jars while on duty. If they’re padding the cash drawer with stolen funds, the money is all too easily retrieved under the pretense of making change.
• Physical audits — Auditing a bar’s inventory is exclusively a management function. A bartender can take advantage of the opportunity by altering the results. Overstating the amount of liquor on-hand essentially will have the same effect as if the theft never occurred.
• Bartender productivity — A bartender with consistently low sales per hour may indicate a serious problem. Explanations include making inferior drinks, having a bad attitude or, worse, stealing sales proceeds, each of which lower productivity.
• Monitoring pour costs — Tracking a bar’s ongoing cost percentages is another fundamental form of control. Not only does it reveal the operation’s level of profitability, pour cost also is helpful in detecting internal theft. Bartender theft causes pour costs to spike sharply, an early warning sign that something is wrong.